Agribusiness company Cargill quietly continues to grow

FFBUSINESS

The agribusiness giant earned a record $4.2 billion in fiscal 2011, a whopping 63 percent jump from the previous year, when profits from its fertilizer company spinoff Mosaic are included.

And Cargill on Tuesday cemented its place as Minnesota's largest corporation, as measured by sales, with $120 billion in annual revenue. That's four times the revenue of 3M and 10 times that of notables like Xcel Energy and Land O'Lakes.

Not that Cargill is doing much boasting about this.

"We don't measure ourselves and the size of the company on the basis of revenues," Sergio Rial, Cargill's executive vice president and chief financial officer, said Tuesday in an interview.

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As America's largest private company, Cargill has long been somewhat mysterious even in its hometown, with its roots in the secrecy-minded culture of the grain trade. It's still owned by members of the intensely private (and fabulously wealthy) Cargill and MacMillan families.

But once a year, the Wayzata-based agribusiness pulls back the curtain -- a bit -- to disclose annual revenue and answer questions. And Tuesday was that day.

As massive as Cargill is -- 130,000 employees in 63 countries -- it remains committed to growing larger still.

The company spent $3 billion last year on acquisitions and expansions across the globe, including acquiring the Australian Wheat Board, a condiment business in Brazil, alcohol operations in Europe,

animal feed mills in Russia, poultry processing operations in Thailand and more. It added 7,000 employees last year, including roughly 1,000 in the United States.

Rial said those acquisitions are designed to increase Cargill's scale, geographic reach and diversity, not to expand into new directions.

"We are not buying companies that are completely out of the realm that we're already competing in," he said, adding that "you can always take diversity to a point where it becomes negative."

But faced with explosive commodity markets, Cargill thinks its global reach last year proved a huge advantage. When a massive drought shut down grain exports from Russia, or regional markets were thrown into turmoil by political unrest or financial crisis, CEO Greg Page said in a statement Tuesday that "Cargill sought to be a 'port in the storm' for our customers, sourcing food and feedstuffs from multiple origins, handling the logistics, managing the risk and delivering reliably."

Critics in rural communities have long complained about Cargill's enormous market power. Others see the company's emphasis on reliability as a secret to Cargill's success.

"They're not a very faddish outfit," said Fred Zimmerman, professor emeritus at the University of St. Thomas.

Added Kevin Linderman, an associate professor at the University of Minnesota's Carlson School of Management, "When I look at Cargill, one of the things that give them a big advantage is they're always looking at the long term. They seem to be wealthy enough to weather the rough spots, but they always have their eye on the long term."

That's partly a reflection of corporate values, Linderman believes, and partly from being privately owned. Lately, there has been some public speculation that Cargill might cease being a private company within a decade and become a public company instead.

Rial downplayed that possibility.

Cargill's biggest change in the past year was its sale of Plymouth-based Mosaic Co., the publicly traded fertilizer giant that was spun off from its parent back in 2004, but remained two-thirds owned by Cargill. The Mosaic sale formally closed on May 25, bringing Cargill a $11.5 billion "one-time accounting gain," the company said.

About one-third of Cargill's 2011 profits came from Mosaic before the sale. Excluding that, annual earnings from Cargill's continuing operations totaled $2.69 billion, up 35 percent from the previous year.